Monday, October 7, 2013

As always it was wonderful to see many of you at the 18th Annual Medicaid Drug Rebate Program Summit! For those of you who did not attend, we hope to see you soon. To download the presentations from MDRP, please click here.

This year's conference was relevant and interesting thanks to all of the great speakers at the event. As we reflect back on the various topics covered at the conference and synthesize the information presented, we want to highlight for you the key themes, future trends, and takeaways that we observed. Hopefully you will find this helpful as you discuss enhancements to the GP compliance program with upper management and other key stakeholders in your organization.

Future Impacts on the GP Compliance Program
A lot of this year's themes seemed to entail future or forward thinking.

• Health Insurance Exchanges (HIX): HIXs are set to take effect in 2014 and most of the contracting has already been set with October as the sign up date. While contracting has not seen any dramatic changes (parallels other managed care contracts), some MCOs have aggressively sought the manufacturer Best Price. While this area will continue to evolve, we are awaiting more information on whether these plans will receive an exemption status and whether these plans will attempt the ever elusive risk sharing contracts. Key areas to watch out for are the bundling of the arrangements between the plans (e.g., Gold, Silver, Bronze) or potentially between your other commercial contracts with the same MCO. (See attached presentation)

•Gross to Net (Evolution of the GP Function): Many of you in the GP arena are beginning to take on broader roles in the area of Gross-to-Net. With Medicaid expansion and the expected growth of the 340B program, incorporating GP into the strategic decision making process is becoming increasingly more important. Additionally, making sure we reduce revenue leakage in those GTN reductions can not only increase our profile within our respective companies, but increase the bottom line. (See attached presentation)

• Bundling: While ACA was business as usual for some companies with respect to unbundling, it was a major change for others. Looking to the future, we seen some potential problems as government agencies cannot seem to agree on a definition. Diverging definitions of bundling between the OIG and CMS can have dire future consequences as we try and comply with both. We must continue to monitor these various definitions and work with counsel to manage our risk.

• Final Rule Readiness: We are currently blessed with regulatory purgatory. Which means that now is the time to get our documentation in order (e.g., Product Master - Get the information that will be relevant to the final rule). You will never look back on this time period again unless something goes wrong, and then it's too late.

• Systems: From a systems perspective, work flow improvement for claims processing is a must as managed Medicaid continues to grow and Medicaid expands. Companies should look to use multi-quarter trending on key thresholds to determine when to adjust/improve automated validations

Recent Developments / Updates
As we might expect, there are still many interesting current topics.

• Authorized Generics: ACA altered the definition of a wholesaler thereby permitting the sales to the secondary manufacturer of the authorized generic to be included. In order to include these sales, we need to first identify whether an AG exists (more complicated than at first blush) and how to incorporate the sales (evaluating the methodological tradeoffs). (See attached presentation)

• 340B: Many manufacturers are receiving checks from what we thought were covered entities. When evaluating these checks and how/whether to incorporate them into our calculations, we must first understand the reason for the refund (e.g., Program Violations vs. Program Eligibility).

• Medicaid Rebates: The volume of Medicaid rebates paid for Managed Medicaid utilization will continue to increase as more and more states shift their Medicaid drug risk to their Managed Medicaid providers. Due to this shift, it is even more critical that manufacturers scrutinize their Medicaid invoices as uncertainty surrounds the validation of the Managed Medicaid claims. An anonymous state survey conducted this past month indicated that over 75% of the state respondents are uncertain if the Managed Medicaid providers are performing ANY claim validations before they are submitted to the state. (Contact Lynn Lewis for further details)

• Current Enforcement: During the enforcement discussion, the US Attorney discussed a settlement with Amgen for $24.9 million on allegations that that Amgen made available and paid to long-term care pharmacy providers (e.g., Omnicare, Inc., PharMerica Corporation, and Kindred Healthcare Inc.) market-share and volume-based rebates, as well as grants, honoraria, speaker fees, consulting services, dinners, travel and purchase of unnecessary data, all related to Aranesp, and that these payments amounted to "kickbacks" under the False Claims Act. The government also asserted that Amgen's therapeutic interchange programs improperly encouraged the "switching" of patients using competitor drugs to Aranesp. The matter was settled to compromise disputed claims and with the express acknowledgement that Amgen was not admitting liability and the government was not admitting that its claims were not well-founded. Based on the settlement, it is unclear whether this was considered a success by the DOJ or a failure, but based on the fact that many manufacturers use market-share rebates/discounts in their typical contracting, it may be prudent to review these agreements in light of the settlement.

Please do not hesitate to contact any of us at IMS Health should you have any questions or like to discuss these or any other topics further.